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Big banks, sponsors embroiled in U.S. soccer probe

ChristopherM. Matthews

A sprawling U.S. corruption investigation into international soccer increasingly is focusing on the role multinational sponsors, broadcasters and banks may have played in facilitating alleged soccer corruption, according to people familiar with the investigation.

In some instances, federal prosecutors are investigating the companies themselves for potential wrongdoing, the people said. In others, it remains unclear if the companies are the focus or if prosecutors are just seeking cooperation.

While U.S. officials hope to reach settlements with some companies, possibly within the next year, progress has been more muted than expected, in part because the investigations involve more than a dozen foreign countries and opaque corporate structures, say the people.

The scrutiny has prompted at least 11 multinational companies and banks to commission internal probes, which can cost millions of dollars to perform. The corporate investigations are looking into dealings with individuals and entities accused by U.S. prosecutors of participating in a $200 million bribery scheme designed to win media and sponsorship rights to lucrative soccer tournaments, prosecutors allege.

The Justice Department's allegations to date have centered on officials at FIFA, soccer's governing body, and its regional affiliates. Prosecutors claim that FIFA officials took bribes from executives at sports-marketing firms for the licensing rights to tournaments like the World Cup qualifiers.

Seventeen of the of 42 people publicly charged have pleaded guilty.

U.S. authorities' focus now has shifted to the relationships between sports-marketing firms and the companies to whom they sold media and sponsorship rights, said people familiar with the matter. The Brooklyn U.S. attorney's office has enlisted the help of the Justice Department in Washington, D.C., and more than a dozen prosecutors are now working on the cases.

Prosecutors also are receiving information from Panamanian authorities who have reviewed the so-called Panama Papers, leaked documents from a Panamanian law firm that set up companies incorporated in places where corporations don't have to file information about their true owners. U.S. officials hope the documents detail money flows and entities involved in the alleged scheme, two of the people said.

Prosecutors are investigating affiliates of DirecTV and Fox that acquired soccer tournament broadcasting rights, people familiar with the matter said.

DirecTV has a minority ownership stake in the Argentina-based marketing firm Torneos y Competencias, whose chairman pleaded guilty last year to paying bribes to win media rights. Prosecutors in December alleged that executives "affiliated" with Cayman-registered T&T Sports Marketing Ltd. bribed more than a dozen soccer officials to win tournament rights. T&T was listed as a Fox subsidiary as recently as last year, according to regulatory documents. Neither Torneos nor T&T could be reached for comment.

Spokesmen for both DirecTV and Fox previously said they exerted no control over the subsidiaries. DirecTV said it is cooperating with authorities, who told it that neither DirecTV nor its employees are targets of the investigation. Fox said it has reviewed the matter on a continuing basis and has been vigilant that its soccer rights were obtained properly. (Fox and The Wall Street Journal owner News Corp were part of the same company until mid-2013.)

In order to make an case against a broadcaster or sponsor, prosecutors would need to prove the companies knew they were overpaying for contracts because of built-in bribes. That is difficult to prove, some of the people said, because there are few comparisons to value contracts for major soccer tournaments.

A spokeswoman for the Brooklyn U.S. attorney's office, which is leading the investigation, declined to comment.

Prosecutors also are examining some of the world's largest financial institutions to determine whether the banks should have raised alarms about money flows linked to alleged corruption at FIFA. More than a half dozen banks have opened internal investigations and are in the process of turning over thousands of bank records, the people said.

While prosecutors have found millions of dollars in potentially tainted funds, they have so far struggled to find evidence the banks knowingly violated anti-money-laundering laws, according to several people familiar with the matter. The banks have argued many of the transactions involved respected businessmen, not publicly tied to corruption allegations.

The Argentine Football Association, whose TV rights have been controlled by that country's government since 2009, conducted business connected to the alleged scheme using the New York branches of "major and regional U.S. and foreign financial institutions," according to the indictment.

According to bank records turned over to prosecutors and reviewed by The Wall Street Journal, HSBC, Citibank, and Credit Suisse handled millions of dollars in transactions for Torneos between 2011 and 2013. Torneos held accounts at Credit Suisse and received tens of millions in payments there from the Argentine national treasury, according to the transactions. HSBC and Citibank banks served as cross-parties to transactions involving Torneos.

HSBC said it had received inquiries from the Justice Department and is cooperating in the investigation. The other banks conducting internal investigations declined to comment.

Nike has been probing allegations of corruption around its 10-year, $160 million agreement to sponsor Brazil's national team, discussed in barely veiled terms in the Justice Department's 161-page indictment.

The indictment describes a multinational U.S. sportswear company that struck a deal to sponsor the Brazilian federation, and then cut a side deal with a sports-marketing middleman, who allegedly used payments from the company for bribes and kickbacks. People familiar with the matter confirmed the company is Nike and that prosecutors are looking into whether any of the company's employees broke the law. Nike and its employees haven't been accused of any wrongdoing.

Nike said it has been cooperating with authorities and there is no allegation any Nike employee was involved in wrongdoing.

Meanwhile, auditing firm KPMG has been investigating its Swiss unit's audits of FIFA, the firm previously confirmed. KPMG had audited FIFA's financial reports since 2009 and audited some of its regional member associations.

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